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Risk Warnings

Before watching any of our webcasts you should read the following risk warnings:

Past performance
Past performance is not a guide to future performance.

The value of your investment
The Investment Trusts managed by Baillie Gifford & Co are listed UK Companies. As a result, the value of their shares, and any income from them, is not guaranteed and could go down as well as up. You may not get back the amount you invested.

Currency
The Trusts invest in overseas securities and changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up.

Emerging Markets (Pacific Horizon, Scottish Mortgage, SAINTS, Monks, EWIT, Mid Wynd only)
These Trusts invest in emerging markets where difficulties in dealing, settlement and custody could arise, resulting in a negative impact on the value of your investment.

Gearing
All the trusts can borrow money to make further investments (sometimes known as “gearing”). The risk is that when this money is repaid by the trust, the value of the investments may not be enough to cover the borrowing and interest costs, and the trust will make a loss. If the trust's investments fall in value, any borrowings will increase the amount of this loss.

Buy back shares
All the trusts can buy back their own shares.  The risks from borrowing, referred to above, are increased when a trust buys back and cancels its shares. 

Liquidity Risk
Market values for securities which have become difficult to trade may not be readily available, and there can be no assurance that any value assigned to such securities will accurately reflect the price the Trust might receive upon their sale.

Concentration (EWIT only)
The Trust's risk is increased as it holds fewer investments than a typical investment trust and the effect of this, together with its long term approach to investment, could result in large movements in the share price.

Derivatives (EWIT, Japan, Mid Wynd, Shin Nippon, SAINTS, Scottish Mortgage and Pacific Horizon only)
The trusts can make use of derivatives. Derivatives are most often used to compensate for possible unfavourable currency and market movements.  As a result, there is a risk that potential gains may be restricted in a rising market.  If derivatives were ever used for speculative purposes there could be a high risk of loss to the trusts due to the large and quick price movements of these contracts. They also carry a risk of the other party involved failing to meet their obligations under the contract.

Derivatives (Monks only)
The Trust makes use of derivatives. Derivatives are most often used to compensate for possible unfavourable currency and market movements.  As a result, there is a risk that potential gains may be restricted in a rising market.  If derivatives were ever used for speculative purposes there could be a high risk of loss to the Trust due to the large and quick price movements of these contracts. They also carry a risk of the other party involved failing to meet their obligations under the contract.

Property (SAINTS only)
The Trust has some direct property investments, which may be difficult to sell. Valuations of property are only estimates based on the valuer's opinion rather than fact. These estimates may not be achieved when the property is sold.

Smaller Companies (Japan and Shin Nippon only)
Investment in smaller companies is generally considered higher risk as changes in their share prices may be greater and the shares may be harder to sell. Smaller companies may do less well in periods of unfavourable economic conditions.

Single Country (Japan and Shin Nippon only)
Single country trusts are generally considered higher risk than those which invest in a number of different countries, as they are exposed to the changes in a single market and currency.

Corporate Bond (Monks, Mid Wynd and SAINTS only)
Investment in corporate bonds exposes you to the risk of non-payment on the part of the issuer and bond prices are sensitive to changes in interest rates. Such investments are generally perceived to carry a greater possibility of capital loss than investment in, for example, higher rated UK government bonds. Under certain market conditions, such as those existing at present, corporate bonds can be more difficult to buy or sell and changes in their prices may be greater than those of government bonds.

Charges to capital (Scottish Mortgage, SAINTS, EWIT and Mid Wynd only)
The following trusts charge a percentage of their investment management and borrowing costs (and property management for SAINTS) to capital; SAINTS – 65%, Scottish Mortgage and Mid Wynd – 50%, EWIT – 75%, which reduces the capital value.  Also, where income is low, the remaining expenses may be greater than the total income received, meaning the Trust may not pay a dividend and the capital value would be further reduced.

Charges to income (Monks, Japan, Shin Nippon and Pacific Horizon only)
Charges are deducted from income. Where income is low, the expenses may be greater than the total income received, meaning the Trust may not pay a dividend and the capital value would be reduced.

Income is less important (Monks, EWIT and Pacific Horizon only)
The generation of income is less important than the aim of achieving capital growth. You should not expect a significant, or steady, annual income from the Trust.

Unlikely to achieve income (Japan and Shin Nippon only)
The generation of income is less important than the aim of achieving capital growth and it is unlikely that the Trust will provide a steady, or indeed any, income.

Continuation Vote (Japan only)
Shareholders in the Trust have the right to vote at the Annual General Meeting on whether to continue the Trust, or wind it up. If the shareholders decide to wind the Trust up, the assets will be sold and you will receive a cash sum in relation to your shareholding.
 
Continuation Vote (Pacific Horizon only)
Shareholders in the Trust have the right to vote every five years, on whether to continue the Trust, or wind it up. If the shareholders decide to wind the Trust up, the assets will be sold and you will receive a cash sum in relation to your shareholding. The next vote will be held at the Annual General Meeting in 2016.

Tax Rates
You should note that tax rates and reliefs may change at any time and their value depends on your circumstances.

Regulation of Investment Trusts
The Trusts are listed on the London Stock Exchange and are not authorised or regulated by the Financial Conduct Authority.

Not investment advice
This information has been issued and approved by Baillie Gifford & Co and does not in any way constitute investment advice.

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